chris Posted March 29, 1999 Share Posted March 29, 1999 Is the termination of a 457 Plan much the same as the termination of a plan qualified under 401??? Also, can a 457 Plan be frozen, i.e., no more deferrals allowed, and the assets held in the plan distributed as per the terms of the plan??? Any help appreciated, ------------------ Link to comment Share on other sites More sharing options...
Guest CVCalhoun Posted March 29, 1999 Share Posted March 29, 1999 Actually, the freezing of a section 457 plan is clearly permitted under federal law. The only issue would be a Constitutional one: in many states, courts have held that you cannot eliminate an existing pension plan for existing employees, unless you provide a pension plan with at least as favorable benefits. Distributing benefits would be more problematical. Section 457(d) provides that benefits are not to be distributed earlier than attainment of age 70½, separation from service, or unforeseeable emergency. No exception is provided for termination of the plan. ---------------------- Employee benefits legal resource site [Note: This message has been edited by CVCalhoun] Link to comment Share on other sites More sharing options...
chris Posted April 1, 1999 Author Share Posted April 1, 1999 Re: termination or freeze of 457 Plan, clearly the plan sponsor could discontinue employees' deferrals and maintain the assets in the plan until a participant is entitled to distribution under one of the three circumstances set out in 457(d)(1). Is that a fair assessment?? ------------------ Link to comment Share on other sites More sharing options...
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